French Capital Gains tax 2011

French Capital Gains tax 2011

A new increased rate of 19% has been introduced for 2011 for French Capital Gains tax. This rate applies to non-French residents of EU who dispose of French Property, and is applicable for completions as of 1 January 2011. French tax residents pay an additional social tax of 12.3% on top of the increased French Capital Gains tax rate of 19%.

As was the case prior to 2011, French property is exempt from French Capital Gains tax after 15 years of ownership, although UK tax residents would need to declare any gain in the UK and may still face UK capital gains tax.

French Capital gains tax is payable in full during the first five years of ownership, and then each full year of ownership after the fifth year attracts a reduction of 10% per year (resulting in a full exemption after 15 years). Like in the UK, there is a primary property exemption for French Capital Gains tax, although as the French Property property must be your primary residence, this exemption is generally only available to French residents.

For any queries, please contact John Kitching on info@frenchlawconsultancy.com John is a qualified Solicitor specialised in French law and estates. For further information on French law, please visit the French Law Consultancy website www.frenchlawconsultancy.com

Civil Partnership now recognised in France

After years of controversy, France has finally amended its legislation and now recognises UK registered Civil Partnerships and affords them similar status and benefits to a French PACS agreement, including an exemption for inheritance tax purposes.

The new law came into effect on 14 May 2009, although for Civil Partners who have paid tax on a gift or inheritance since 22 August 2007, a reclaim may be possible.

Prior to 14 May 2009, UK Civil Partners leaving French property to their Civil Partner would have faced inheritance tax at 60%, the rate applicable for transfers to non-blood relatives. There is a full exemption for spouses and for PACS couples. The PACS agreement allows same sex or different sex partners who are not married, to register their partnership and benefit from similar tax breaks to married couples, including a full exemption on inheritance tax. However, you had to be free to marry in order to be eligible to register as a PACS couple. UK Civil Partners were not able to register for this reason.

An interesting footnote to the new law allows a reclaim of tax for Registered Civil Partners where the date of the gift or the date of the probate was after 22 August 2007

For more information please contact French Law Consultancy www.frenchlawconsultancy.com

£1 finally hits 1.20€ - highest for 18 months

According to some currency dealers, the technical levels for exchange rates have finally attained 1.20 Euros per pound, the strongest position of the pound against the Euro for 18 months.

This is still only the technical level for large commercial level currency transactions, but it remains the highest level since 2008, and results from the recently weakening Euro and a few days of volatile currency rates. The Euro is currently at its lowest rate against the US dollar since April 2006.

The 1.20 €/£ rate is expected to trigger a flood of property transactions from purchasers who have secured the exchange rate through a "forward contract", although the rate has not yet passed down to all but the most expensive property transactions. However, given the volatility of the markets over the past weeks, this level may come or go rapidly. If you are considering purchasing French property, it would be wise to contact a currency dealer to discuss securing an exchange rate and to discuss the prospects for the currency market.

We are happy to independently recommend currency dealers if you require assistance.

John Kitching French Law Solicitor www.frenchlawconsultancy.com info@frenchlawconsultancy.com

French Property prices - Paris on the up

The average French Property price continues to rise in Paris, according to a study from website drimki.fr . As shown from the data, location is all important. Some areas perform well, while others continue to struggle.

The chart below shows the district of Paris, the average price per square metre in the district, and the monthly price variation.

Prix de l'immobilier	Prix moyen / m2	Evolution mensuelle
Paris 1er	8074 €	0.94%
Paris 2eme	7004 €	1.43%
Paris 3eme	7647 €	0.73%
Paris 4eme	9227 €	1.52%
Paris 5eme	8139 €	1.89%
Paris 6eme	9646 €	1.06%
Paris 7eme	9077 €	-0.11%
Paris 8eme	7868 €	-0.87%
Paris 9eme	6578 €	1.54%
Paris 10eme	5897 €	1.63%
Paris 11eme	6175 €	1.94%
Paris 12eme	5941 €	0.54%
Paris 13eme	6060 €	1.88%
Paris 14eme	6685 €	1.18%
Paris 15eme	6666 €	0.5%
Paris 16eme	7437 €	-0.18%
Paris 17eme	6066 €	1.06%
Paris 18eme	5737 €	1.45%
Paris 19eme	5090 €	1.88%
Paris 20eme	5252 €	0.16%

John Kitching www.frenchlawconsultancy.com

info@frenchlawconsultancy.com